diffence bt micro and macro economics
Answers
MICRO ECONOMICS vs MACRO ECONOMICS
Micro economics is a study of individual or small units. like particular firm, industry, price of a commodity, etc. Macro economics is a study of aggregates like national income, total employment, aggregate demand, aggregate supply, etc.
Price Determination :
In Micro economics the price of the commodity is determined with the help of demand and supply. In Macro economics the level of income also plays an important role along with demand and supply in price determination.
Study Of
In Micro economics we study some aggregate concepts, but the aggregate in micro economics is different from macro economics. for example, An industry is a group of firms. In Macro economics we study the aggregate relating to the economy as a whole. for example National Income, Aggregate demand, Aggregate supply, etc.
Time Consideration
In micro economics importance is not given for time element in determining the price.In Macro economics importance is given to the time element in price determination. Also Called as Micro economics is also known as "Price Theory", because of giving importance for price determinantion of various commodities and factors. Macro economics is called " General Theory" or "Income and Employment Theory" as it gives importance for the determinantion of national income and employment.
Micro economic is used for single firm study and Macro economic is used for whole economy study.
Tools of Macro Economics:
1. Fiscal policy
2. Monetary Policy
3. Exchange Rate Policy
Tools of Micro:
1. Consumer Theory
2. Demand and Supply
3. Production of Individual Firm
Examples
1. Micro : Consumer behavior, Profit Maximization
2. Macro : Market, Market Demand